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POLAND: Tax System Overhaul

The Ministry of Finance presented the long-anticipated plan for a tax system reform. The amendments proposed by the ministry are focused on making regulations more transparent and simpler. Approximately 20 new propositions have been laid out by the ministry, including: a taxpayer’s ombudsman, tax agreements, mediation and consultations. Tax authorities are to become more open in relations with taxpayers – offering help and assistance. The planned reforms will be subject to public consultations by the end of the month.

The tax system in Poland is generally considered complicated and troublesome. Numerous analyses indicated that the tax system significantly discourages the creation of companies and their development. Nearly 100 amendments over a 20-year period were made to the current system, many questioned by the Constitutional Tribunal, creating confusion even amongst tax authorities.

The PiS government has already made attempts at simplifying the system, for example by providing an automated service of filing personal income tax declarations. The planned reforms are likely to positively affect the business environment, encouraging young entrepreneurs and decreasing accounting expenses. Moreover, the overhaul is part of a larger policy strategy, which is aimed at increasing state budget incomes by decreasing the size of the gray market. While PiS has already managed to increase tax revenues by operational crackdowns, a wider systemic change is needed to further close the gap.